Viper Energy (VNOM) Valuation Check After Growth Update Dividend Hike And Buyback Expansion

Simply Wall St

Fri, February 27, 2026 at 3:09 AM GMT+9 3 min read

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Viper Energy (VNOM) is back on investors’ radar after reporting 2025 results that combine larger Permian mineral holdings, higher production, and higher revenue with a full year net loss and a higher base dividend.

See our latest analysis for Viper Energy.

Recent earnings, production guidance and dividend news have come against a stronger backdrop for the shares, with a 30 day share price return of 11.79%, a 90 day share price return of 23.32% and a 1 year total shareholder return of 4.83%. This suggests momentum has been building in the shorter term, while longer term gains remain more modest.

If Viper’s recent move has you looking across the energy value chain, it can be worth checking which names are powering infrastructure growth. You can start with our 24 power grid technology and infrastructure stocks as a ready made shortlist.

With revenue rising to US$1.4b in 2025, a full year net loss, a higher base dividend and a larger buyback in place, the key question is simple: is Viper still undervalued here or already pricing in future growth?

Most Popular Narrative: 36.6% Overvalued

According to one widely followed narrative, Viper Energy’s fair value of $32.99 sits well below the last close at $45.05, which creates a clear valuation gap for investors to think about.

This is one of three major benefits the company brings to the table: As I just briefly explained, the company has a high-margin business model, as it does not incur drilling costs. The Permian is home to almost half of all onshore horizontal rigs in the United States. Essentially, it is described as a key region for oil and gas production with elevated reserves and low breakeven prices. In a recent article, I showed the chart below. As we can see, the Permian has mostly undeveloped wells, which is presented as a positive for future production. Image Bloomberg Related to the second advantage, the Permian also benefits from decent infrastructure, a favorable regulatory environment, and lower operational risks compared to emerging basins. Nonetheless, because of elevated production, more infrastructure is expected to be needed in the years ahead, which is one of the reasons why I’m also very bullish on the midstream industry.

Read the complete narrative.

Want to know what kind of revenue runway and profit margins sit behind that valuation call, and how the future earnings multiple is being framed against those assumptions? The narrative focuses on the economics of Permian minerals and a specific path for cash generation that is described as very different from traditional drillers. If you are curious how those moving parts are used to arrive at a fair value that sits below today’s price, the full storyline connects all the dots.

Story Continues  

Result: Fair Value of $32.99 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, you also need to weigh risks like Viper’s US$68m net loss and the chance that Permian drilling activity or mineral valuations evolve differently than assumed.

Find out about the key risks to this Viper Energy narrative.

Another Take: Big Discount From Our DCF Model

That 36.6% overvaluation call is only one side of the story. Our DCF model points the other way, with Viper Energy at $45.05 compared to an estimated future cash flow value of $128.18. That is a very large gap in the other direction. Which set of assumptions do you trust more?

Look into how the SWS DCF model arrives at its fair value.

VNOM Discounted Cash Flow as at Feb 2026

Next Steps

With such different views on value and mixed sentiment in the story so far, it makes sense to look at the numbers yourself and move quickly to shape your own view. You can start with 2 key rewards and 2 important warning signs.

Ready for your next investing idea?

If Viper has sharpened your thinking, do not stop here. Use the Simply Wall St screener to spot other opportunities that might fit your style.

Target quality at a discount by checking companies in our 53 high quality undervalued stocks that combine fundamentals with prices that may not fully reflect them.

Build a steadier income stream by scanning dividend payers in the 15 dividend fortresses and see which yields stand out for you.

Sleep a little easier by reviewing companies in the 80 resilient stocks with low risk scores that score well on financial strength and business risk.

_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include VNOM.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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